Retailers’ total advertising spending is expected to increase by a “low single-digit” percentage this holiday season, according to a new forecast from data analytics firm Kantar Media. That would mark a change from a year ago when holiday season ad spending fell nearly 6%—to $3.70 billion from $3.9 billion—from Nov. 1-Dec. 31 compared with the previous year.

Retailers’ shift to digital advertising and away from more expensive TV and print ads is one reason behind last year’s slowdown, says Jon Swallen, Kantar Media Intelligence North America’s chief research officer. Last year, 25% of retailers’ marketing spending was allocated to digital ads during the holidays, and Kantar expects that share to rise this year while TV advertising is flat or down slightly.

The pivot away from TV stems from consumers’ growing use of streaming services and digital video recorders that allow them to avoid watching ads.

“Advertisers haven’t lost faith in TV advertising,” Swallen says. “But TV isn’t delivering the audiences it once did. As TV’s audience shrinks, retailers are reallocating their budgets.”

Retailers that shift from TV to digital ads likely will change their messaging approach, as the channels have different uses; TV ads are typically used for brand building while digital ads are far more transactional, with a clear direct-response element, he says.

With only 26 days between Thanksgiving and Christmas Day, retailers will likely struggle to stand out amid the “competitive clutter,” particularly later in the season as they seek to hit or exceed their sales targets, Swallen says.

“Retailers aren’t going to spend less on ads this year, but they’ll have less time to spread their dollars out,” he says. “That may lead more retailers to use discounts and promotions to try to attract attention. That could make for a difficult market for retailers to navigate.”

Google ad spending

One likely beneficiary of that competitive environment is Google, as Kantar expects retailers to increase their spending on paid search ads.

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